Straight Talk for a Straight-Talking President

In his interview in Sunday’s Times Magazine, President Obama was quick to point out that “most doctors want to do right by their patients.” But he went on to say, “so if it turns out that doctors in Florida are spending 25 percent more on treating their patients as doctors in Minnesota, and the doctors in Minnesota are getting outcomes that are just as good — then us going down to Florida and pointing out that this is how folks in Minnesota are doing it and they seem to be getting pretty good outcomes, and are there particular reasons why you’re doing what you’re doing? — I think that conversation will ultimately yield some significant savings.” And that’s straight from the Dartmouth playbook, which is never straight. So let’s take a look at what’s really going on.

Yes, President Obama is right. Adjusted for price, Medicare expenditures per enrollee are 25% higher in Florida than Minnesota. And, as measured by various quality standards, Florida ranks lower. But the quality standards used reflect health care throughout the community, not just among Medicare patients – indeed mammography screening rates are lower in Florida in both the Medicare age group and among younger women. Such outcomes depend on inputs from all sources, not just Medicare. So how do Minnesota and Florida stack up? Minnesota spends more per capita, not less – 13% more. It’s not a low-cost haven. Minnesota has lower Medicare expenditures but, with fewer uninsured, good benefits plans and generous Medicaid, it spends more overall – and it gets more!

If the President visits Miami and Minneapolis, he’s likely to find out something else – something that he’s had lots of experience with in Chicago. He’ll find poverty in Miami, especially in the Medicare age group. Almost 30% of Miami’s seniors are below the poverty line, triple the rate in Minneapolis. When the distribution of household income is examined, Miami resembles Chicago’s 17th and 20th Wards – familiar turf for the President – a preponderance of poor households. And we know that folks in the lowest range of household income use twice the health care resources as those in the top, or even middle (see “Lets Talk About Poverty“). Although the Dartmouth folks grumble that “single working mothers in Nebraska are footing the bill for gold-plated health care provided to high-income Medicare enrollees in Miami,” it’s Miami’s poor who use the most. So, the message is that poverty is expensive to the health care system, including to Medicare , and like Chicago’s south side, south-Florida has lots of it, while Minneapolis has very little. Miami’s poorer outcomes reflect its burden of poverty and Florida’s overall under-investment in health care. Yes, Mr. Obama is right. A straight-talking conversation will ultimately yield significant insight about spending. The title of that conversation may surprise some, but it won’t surprise the President – it’s POVERTY.